Title
Aparicio vs. Manila Broadcasting Co.
Case
G.R. No. 220647
Decision Date
Dec 10, 2019
Radio technicians dismissed by MBC for redundancy; Supreme Court upheld dismissal, ruling MBC's "Hating Kapatid" program valid, meeting legal requirements.
illegal dismissal
termination without just cause
redundancy

Case Summary (G.R. No. 220647)

Factual Background

Petitioners alleged that they were radio technicians assigned to specific MBC transmitter sites and stations: Noli Aparicio and Renan Clarito at the transmitter site of DYEZ (local AM radio) and DZRH (a relaying station and nationwide AM radio) in Barangay Taloc, Bago City. MBC, which was engaged in radio broadcasting, later served them with a termination notice. On February 28, 2002, petitioners received a Notice dated February 22, 2002 signed by MBC President Roberto Nicdao, Jr., terminating their employment with separation pay effective thirty (30) days from notice, or on March 31, 2002. Petitioners contended that their dismissal lacked a just or authorized cause and did not satisfy the notice requirement. They further argued that the purported ground of retrenchment or redundancy was not proven, and that the action was tainted with bad faith because it was allegedly meant to replace them.

For its part, MBC asserted that management was directed, in the last quarter of 2001, to review operations of all its stations. MBC claimed that the review showed several losing stations were subsidized by the more profitable Manila stations. As remedial measure, MBC said Chairman Fred Elizalde implemented a policy called “Hating Kapatid” through a Memorandum dated January 10, 2002, under which each station was treated as independent of the head office and would no longer be subsidized. According to MBC, as a consequence of this independence policy, stations had to review their own manpower complement. MBC stated that FFES Bacolod, described as a relay station of DZRH, was shut down, and that because DZRH could already be heard in Bacolod City through FFES Iloilo, the continued operation of FFES Bacolod as a relay station became unnecessary. MBC thus retrenched employees assigned there, including petitioners Aparicio and Clarito. MBC maintained that the downsizing and retrenchment were part of a legitimate redundancy program, and that the affected employees received separation pay equivalent to one (1) month salary for every year of service, effective thirty (30) days from notice. It also claimed that it submitted the Revised RRS Form and Establishment Termination Report to the Department of Labor and Employment (DOLE) on the same day it served the retrenchment notices, stating that redundancy and company reorganization and downsizing brought about the retrenchment.

Labor Arbiter Proceedings

Before the labor arbiter, petitioners and other co-complainants filed complaints for illegal dismissal, reinstatement, backwages, moral damages, exemplary damages, and attorney’s fees. The record reflected that after a preliminary conference, their money claims were settled except claims for moral and exemplary damages and attorney’s fees, and that the validity of the dismissal was not amicably settled.

By Decision dated July 27, 2007, Labor Arbiter Elias Salinas ruled that petitioners and the other complainants were illegally dismissed. The labor arbiter found no evidence of serious business losses and financial reverses. It also found no showing that MBC used fair and reasonable criteria in choosing the positions to be retrenched, and it noted that the mechanics of the “Hating Kapatid” program were not explained to the employees. Instead of ordering reinstatement, the labor arbiter awarded petitioners separation pay due to strained relations with MBC and computed backwages and separation pay in favor of the employees. The labor arbiter further ordered ten percent of the judgment award as attorney’s fees, while dismissing other claims for lack of merit and by reason of settlement.

Appeal to the NLRC and Petitioners’ Partial Appeal

MBC filed an appeal with the NLRC, and petitioners likewise pursued a partial appeal by memorandum on October 31, 2007, challenging the award of separation pay instead of reinstatement and alleging omissions in the labor arbiter’s ruling on other monetary claims. MBC countered that the affected employees had voluntarily received separation pay as a consequence of retrenchment and that the appeal was filed late. MBC also asserted that the labor arbiter’s decision became known to it only after it received petitioners’ memorandum of appeal. The NLRC, however, treated the appeal as timely.

By Decision dated November 25, 2008, the NLRC reversed the labor arbiter. It held that MBC’s appeal was timely filed. On the merits, the NLRC viewed reorganization as a recognized cost-saving measure and ruled that an employer is not barred from adopting a new policy conducive to more economical and effective management. It also declared that the law does not require that actual financial losses be suffered before an employer may terminate employment on ground of redundancy.

Petitioners sought reconsideration, but by Resolution dated April 24, 2009, the NLRC denied it.

Proceedings in the Court of Appeals

Aggrieved, petitioners went to the Court of Appeals via certiorari, charging grave abuse of discretion on the part of the NLRC in favor of MBC. Petitioners argued that it was implausible for MBC to have received the labor arbiter’s decision only on February 7, 2008, because a notice of decision dated August 23, 2007 allegedly indicated that counsels were furnished copies of the decision at their addresses on record. Petitioners further stressed that MBC’s counsel was notified through a service attempt made at an address that later became inoperative due to alleged transfer. They narrated that MBC’s counsel, Atty. Rodinil Bugay, had an office address on record in Makati City, but he moved to a new address in Pasay City without informing the labor arbiter. Petitioners contended that a service attempt on November 5, 2007 was returned “moved out,” and that service was deemed complete five days thereafter, thus the appeal period expired on November 20, 2007. Yet, according to petitioners, MBC filed its appeal only on February 18, 2008.

MBC responded that the labor arbiter’s earlier communication to the new address served on counsel on June 7, 2004 amounted to recognition of that address. It also argued that the NLRC is authorized to evaluate evidence and make its own factual findings.

By Decision dated August 20, 2013, the Court of Appeals held that MBC’s appeal was timely filed. It found no valid service of the labor arbiter’s decision on counsel’s alleged new address without proof that counsel failed to give notice of his transfer to the labor arbiter. On the substantive labor issue, the Court of Appeals ruled that the termination of other employees was illegal only to the extent that MBC failed to consider statutory criteria of preferred status, efficiency, and seniority, but it found no bad faith. As to petitioners Aparicio and Clarito, it ruled that their services were no longer needed because FFES Bacolod, where they were assigned, had been abolished. The Court of Appeals thus reversed and set aside the NLRC decision insofar as it concerned the other employees, but upheld the termination for petitioners Aparicio and Clarito. The Court of Appeals denied reconsideration through Resolution dated August 25, 2015.

Issues Presented to the Supreme Court

Petitioners raised two issues: first, whether the Court of Appeals committed reversible error in ruling that MBC’s appeal to the NLRC was timely; and second, whether petitioners were validly dismissed on ground of redundancy.

Ruling of the Supreme Court: Timeliness of MBC’s NLRC Appeal

On the procedural issue, the Court held that the assessment depended on the date MBC received the labor arbiter’s Decision dated July 27, 2007, and the applicable rule on service of registered mail. The Court relied on Bernarte v. PBA, which teaches that service by registered mail has two situations: actual service, whose completeness is determined by receipt by the addressee; and constructive service, whose completeness is determined upon expiration of five days from the date the addressee received the first notice from the postmaster. The Court underscored that constructive service requires conclusive proof that the first notice was duly sent by the postmaster. It further emphasized that the presumption of regularity in the performance of official duty does not apply in that context. The Court stressed that the party invoking constructive service must prove that notice was both sent and received, and that the best evidence would be a postmaster certification detailing how, when, and to whom delivery and receipt were made, or testimony of the mail carrier.

Applying the standard, the Court held that petitioners failed to present the required proof. Petitioners’ evidence amounted only to the mail carrier’s notation “Moved out” dated 11/05/07. The Court ruled that such notation did not suffice to prove that MBC had moved to a new address without notice to the labor arbiter. Petitioners also allegedly failed to present other supporting documents, such as a certification from the labor arbiter’s office showing the address on record or a certified true copy of a supposed joint declaration where counsel indicated his old address. The Court thus found that petitioners did not sufficiently prove that MBC’s appeal was filed out of time.

The Court further affirmed the conclusion of the NLRC and the Court of Appeals that MBC’s receipt of the labor arbiter’s decision should be reckoned on February 7, 2008, the date when MBC received a copy not directly from the labor arbiter but from the NLRC after MBC manifested that it had not yet received the decision. Consequently, when MBC filed its memorandum of appeal on February 18, 2008 (with February 17, 2008 being a Sunday), the filing was held to be within the reglementary period.

Ruling of the Supreme Court: Validity of Petitioners’ Dismissal for Redundancy

On the substantive issue, the Court held that petitioners’ employment was validly terminated for redundancy, an authorized ground for termination under Article 298 of the Labor Code, as amended

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